Spain networks fight over soccer rights

Sogecable and Mediapro vie for futbol crown

MADRID — This season, the biggest ration of passion in Spanish soccer isn’t on the pitch. It’s in the soccer rights nailbiter played out between current holder pay TV giant Sogecable and upstart Mediapro.

The latest move came Nov. 8 when Mediapro tried to introduce Italian-style pay-per-view soccer via digital terrestrial into Spain. In Italy, aided by state-subsidized set-top boxes, Silvio Berlusconi’s Mediaset and Rupert Murdoch’s’ Sky Italia have turned digital pay TV soccer into a hit.

Mediapro’s pricing — $17.5 for 12 matches — is even more aggressive than Mediaset’s $232 for a season.

Soccer could kickstart Spanish digital uptake. But to get this boost, Mediapro needs a governmental greenlight and has to prove it owns soccer rights.

In July, Mediapro announced rights to 39 clubs from 2009-10, and 12 clubs, including soccer giants Real Madrid and Barcelona, from 2008-09.

Sogecable, whose satcaster Digital Plus airs the league on premium pay and pay per view, immediately threatened legal action, claiming that Mediapro had breached a July 2006 deal. In it, Mediapro took a minority stake in Sogecable’s Audiovisual Sport, which manages league rights, partly in return for promising not to negotiate unilaterally future soccer rights.

Mediapro argues the shareholding never went through. Fighting back, Sogecable has sued Mediapro for fraud.

“This isn’t war, it’s sabotage,” says Juan Luis Cebrian, CEO of Sogecable shareholder Prisa. The case still has to go to court.

Meanwhile, Mediapro’s already tested smart-card set-top boxes in a Spanish town, Alcazar de San Juan. Only 5% of Spain’s rudimentary digital set-top boxes have smart-card capacity. But, Mediapro business development manager Jaume Ferrus, told Madrid’s Ficod Intl. Forum on Digital Contents, upgrading decoders would just cost $22-$29 per box.

Sports rights through 2014, led by soccer and Formula One motor racing, will cost Mediapro and partner Arbol $3.2 billion, admits Mediapro topper Jaume Roures.

That sum and Spain’s soccer rights slugfest underscore a radical shift in the balance of power of Spanish TV content, driven by the opening-up of multiple film windows, piracy and market fragmentation.

“Fiction and football used to be TV kings. Now, it’s just football,” says an analyst.

The sums being paid for soccer are unprecedented. Market-wise, they may be unjustified.

“Mediapro needs digital to justify what it’s paid, or to lean on Sogecable to pay more for pay TV soccer,” the analyst says.

According to Andres Armas, secretary general of Impulsa TDT, a digital cable operators lobby, just over half of Spanish households can now technically access the service. But 40% of 2007 sales come from Spaniards buying flatscreen TVs, which happen to have digital receivers.

In October the audience share for digital was just 8.3%. Launched November 2005, Spain’s 20-or-so main digital channels usually clone broadcasters’ flagship analog services. Broadcasters’ digital problem isn’t a lack of coin to invest in original content. Quite the opposite. Their core analog channels have been churning too much dinero for them to fiddle around with digital.

“Spain has a low pay TV penetration, 24.6% in 2006, so large potential for digital,” says Maria Aguete, at research company Screen Digest.

Soccer may be the way to tap that potential.

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